GDANSK (July 6): Amazon has agreed to take a 2% stake in Just Eat Takeaway.com's struggling US meal delivery business Grubhub and will offer its Prime members access to the service for one year.
The deal is a major relief for Just Eat, whose shares have fallen 70% this year as shareholders demanded it sell or find a partner for Grubhub, which it bought just last year for US$5.8 billion in shares.
Shares in Just Eat rose 16% in early trade.
Under the deal announced on Wednesday, Amazon will receive warrants representing 2% of Grubhub's shares, and an additional 13% conditional on the deal bringing Grubhub enough customers.
"The agreement is expected to expand membership to Grubhub+, while having a neutral impact on Grubhub's 2022 earnings and cash flow, and be earnings and cash flow accretive for Grubhub from 2023 onwards," Just Eat Takeaway said in a statement.
The company said that Grubhub's gross assets were worth €6.5 billion (US$6.67 billion) at the end of 2021, and it made a pre-tax loss of €403 million in that year.